Florida Governor Rick Scott expands Medicaid

Feb 22, 2013

On Wednesday, Florida governor Rick Scott became the seventh Republican governor to back Medicaid expansion under the Affordable Care Act. From Bloomberg:

Florida Governor Rick Scott supports expanding Medicaid in his state under President Barack Obama’s health-care law, at least while the federal government pays for it, a reversal of the Republican’s previous position.

Scott said yesterday in Tallahassee that he’ll ask state lawmakers to back the expansion. After the U.S. Supreme Court upheld the law in June, Scott said he wouldn’t expand Medicaid, the health-care program for the poor, in Florida. Once Obama won re-election in November, Scott said he was open to it.

….

Expanding Medicaid under the federal law would add 1.28 million Floridians to the program during the next 10 years, according to a November 2012 report from the Kaiser Commission on Medicaid and the Uninsured, a nonprofit research group.

Scott said he supports a “limited” expansion that would last for three years, while the U.S. pays for the added cost. That’s a reasonable time to judge the expansion and “a compassionate, common-sense step forward,” he said.

Governor Scott, a former health care executive whose company paid the largest health care settlement in American history for Medicare fraud a few years after he was forced out as CEO, was the first national figure to launch opposition to what became Obamacare. In 2009, he created Conservatives for Patients Rights, which effectively began the legal opposition to Obamacare.

Governor Scott is claiming this “is not a white flag of surrender” to the federal government, but according to the Florida Director for Americans for Prosperity, it’s a white flag for political reasons:

“He’s worried about his re-election,” Slade O’Brien, Florida director for the Arlington, Virginia-based American’s for Prosperity, said by e-mail. “We can’t let Governor Scott put personal political ambition ahead of principled conservatism and what’s right for Florida taxpayers.”

Governor Scott has been lambasted across the conservative blogosphere and other media, and rightly so – after all, he opposed Obamacare and now is helping to expand it, as well as expand costs to the federal government and Florida taxpayers. However, there are a couple of caveats to these criticisms. From Erick Erickson at Red State, in a post entitled “I Am Very Disappointed in Governor Rick Scott,” come both condemnation and praise. First, the condemnation:

The long term ramifications for Florida will be bad. The federal flow of dollars will not last and Florida will have to make up more and more funding. This decision will, long term, seriously harm Florida and make it less and less competitive.

Governor Scott is interested in getting re-elected and has terrible poll numbers. No doubt part of this decision has to do with his wanting to get re-elected.

When politicians do what they feel they must to get re-elected instead of doing what they know is right, they often lose re-election and, even when they do not, lose their way.

However, Erickson points out the news isn’t all bad:

It is worth pointing out that before making this decision Governor Scott was able to extract a few concessions from the Obama Administration. HHS is going to allow Scott to privatize Medicaid coverage, which is actually a huge deal and Scott will only do this for three years in a trial run, that he may then end after that time and before federal funding drops.

Over at the Washington Post Wonk Blog, Sarah Kliff provides some important clarifying information as to why Governor Scott and other governors have stood strong against the health care exchanges while supporting Medicaid expansion. In short, there is little political upside to supporting the exchanges…and a lot of political advantage in supporting Medicaid expansion:

The Urban Institute ran the numbershttp://www.kff.org/medicaid/upload/8384.pdf and found that, if all states participate in the Medicaid expansion, it would bring $952 billion in new federal dollars to state Medicaid programs and cover 21.3 million people. For the first three years, the federal government will also cover all costs for those newly-eligible enrollees. That’s way more than it usually pays for Medicaid: The federal government typically foots somewhere between 50 and 70 percent of a state’s Medicaid bills, depending on poverty levels.

For states, the implications of this could be huge: Nearly $1 trillion in new federal funding would cover many of the medical bills that, right now, go unpaid. They’re usually picked up by hospitals or local governments, which run indigent care programs.

Or, as Scott put it in a press conference last night, “While the federal government is committed to paying 100 percent of the costs, I cannot deny Floridians who need access to health care.”

If Scott did not opt-into the new program, he foresaw himself having to explain to Floridians why their federal tax dollars would fund a Medicaid expansion in other states, but not the one where they lived.

“Our options are either having Floridians pay to fund this program in other states while denying health care to our citizens, or using federal funding to help some of the poorest in the state,” Scott said.

Scott sided with the latter option, even when declining to build a health insurance exchange. He has no back-up option, a lot of downside to sending federal tax dollars elsewhere—and a lot of upside in bringing billions in Medicaid funding into his state.

This increase will increase costs to the nation’s taxpayers. Scott managed to extract two compromises from the federal government, a privatization of Medicaid and essentially a three-year trial of the expansion, after which Florida will have the option to roll back the program. However, the historical precedent of a state reducing any means-tested or entitlement once it’s established is non-existent.

The bottom line is that this expansion empowers Obamacare, no matter how Governor Scott spins it.